Earlier quoted context omitted.
What do they do to make money once they have their users on board?
They really do sell flow and use margin. There just isn't any way they're profitable doing just that.
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Robinhood stock trading app valued at $1.3B with big raise from DST
151–160 of 175 posts
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#152Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#153Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#154Earlier quoted context omitted.
Buy and hold will work until it doesn't and a lot of people will be left holding the bag, especially if you need the money at the bottom for medical, retirement, etc... Just check the Japan’s Nikkei stock index, almost 30 years later people are still waiting and are far far away from the top...
So what you're saying is that if the market starts behaving significantly different than it has throughout history, people will be screwed. How exactly does backtesting help you in this scenario? By definition, basing a strategy off a good backtest is assuming that the market will behave similarly in the future as it has in the past.
People are people, they are greedy, selfish and they scare all the same no mater if it was the tulip or the dot com or the financial bubbles, that's why I am confident in my back tests and that's why I am investing and trading successfully and I am happily waiting for the next bubble to shake things up and present even more opportunities...
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#155Aren't there opportunities for arbitrage given the zero transactional costs on Robinhood? I haven't thought it through that much, but it feels like a lot of sound trading strategies (which were previously impractical due to high transactional costs) can be made to work on Robinhood. *Maybe arbitrage is the wrong term, but zero cost of trading would mean more efficient trading strategies. No?
Can we just clear this up now? You're just paying wider spreads and they're making money that way. So no, and if you want low execution fees, you're up against the hedge funds that are members of the exchange. Talk about low fees per trade
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#156Here are my 2cents: Robinhood is irrelevant and border line dangerous. Irrelevant, because for someone who knows what they are doing in the stock market paying $10 or $0 per trade is not going to save them any money. Dangerous, because it promotes more trades for the “unsophisticated” investor and encourages leverage = very dangerous situation. Bottom line, if you do not know what you are doing, don’t do it, buy and…
You're right, Buy and Hold is a terrible strategy. Look how poor Warren Buffet is as a result of holding. /sarcasm Not having capital isn't the same as being unsophisticated. I could do all the right research on which stock I want to buy, but if I only have $100 to invest at the end of every month $10 fees would dig into my earnings very quickly. Assuming that people without large amounts to invest are stupid says mo…
> Not having capital isn't the same as being unsophisticated.
Except in the regulatory framework we live in worldwide.
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#157Robinhood is just a marketing play. Anything about them selling flow or using margin offerings to become profitable is not realistic. Traditional brokerages have a customer acquisition cost of around $400 to get someone to deposit at least $100 in an account. They've got a million users and continue to grow quicker and quicker. For a small multiple of traditional CAC they are already close to their >$1B valuation jus…
Financial services is the easiest business to make money =IF= you can get customers.
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#158Earlier quoted context omitted.
If you are committing to buy-and-hold you are committing to buying a diversified portfolio. No one advocating buy-and-hold recommends buying one thing.
If you back tested and you re confident in your analysis, more power to you! I am yet to find a truly diversified portfolio that can generate good returns for me... My back tests and analysis are showing that I am not OK with buy and hold, because I don't want to stomach 50% draw downs or to wait 15 years for the NASDAQ to bounce back... I am not that risk tolerant and I might need to sell some of my investments for…
Well, yeah. If you are not risk tolerant you shouldn't be investing in the stock market.
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#159Here are my 2cents: Robinhood is irrelevant and border line dangerous. Irrelevant, because for someone who knows what they are doing in the stock market paying $10 or $0 per trade is not going to save them any money. Dangerous, because it promotes more trades for the “unsophisticated” investor and encourages leverage = very dangerous situation. Bottom line, if you do not know what you are doing, don’t do it, buy and…
I'd only use Robinhood to buy cheap index ETFs. 99% of people should not be buying individual stocks.
Re: Robinhood stock trading app valued at $1.3B with big raise from DST
#160ITT: people who've increased their wealth through ownership of shares telling other people not to increase their wealth through ownership of shares.